When a ‘Salary’ is too good to be true…

Posted by Roxanne Chugg

More often than not an employer will choose to engage an employee on a ‘salary’ and disregard basic employee entitlements. Employees believe that the term ‘salary’ has a status associated with it, but more often than not it is undermining their entitlements. Unfortunately the naivety of employees regarding their minimum conditions and entitlements allows this practice to continue.

Regardless of whether an employee is engaged ‘on a salary’ an employer is still required to comply with the relevant award conditions. Yes, an employer can annualise a ‘salary’ but they can not remove an employee’s minimum conditions and entitlements as per the National Employment Standards. The annual salary can not be less than what the employee would receive if paid as per the modern award entitlements and many awards specify an above award rate percentage must be applied to annualise a ‘salary’.

Picking a salary because it seems about right is not the way to go, if unsure seek advice, getting it wrong could mean an investigation and/or prosecution, back pay and damage to your reputation.